As the three-week conciliation period on the EU 2015 budget started on 28th October 2014, research in Europe is facing a funding crisis. And this time, the harbingers of doom are not grumbling scientists, gloomy economists or critical journalists, but powerful voices within the European Commission (EC) itself.
A recent statement from Jacek Dominik, the new EC Commissioner for Financial Programming and Budget, warned that “business as usual is no longer an option.” Why? Put simply, because most of the available cash for the 2014 budget has already been spent, something Dominik says has “never happened before this early in the year”. To compound matters, there aren’t enough funds elsewhere cover the shortfall.
Dire impact of payment delays
The result is that 70—mainly ICT—research projects funded under Framework Programme 7 (FP7) are waiting for €36m euro, which will eventually have to be paid out with interest. In addition, pre-financing levels for new commitments under the EC’s new flagship Horizon 2020 (H2020) science programme have been reduced to 35%, from the 60% under its predecessor FP7. And an estimated 40% of Horizon 2020 commitments may remain outstanding in 2020.
And it does not stop there. Payment delays are hitting the businesses, suppliers and SMEs further down the chain as projects delay procurement of everything from equipment to staff, or are forced to seek short-term credit to do so.
The European Association of Research and Technology Organisations (EARTO) has confirmed that its members are affected by decreased and late payments. “We see SMEs as fragile partners in projects; lack of pre-financing for them could really put the project at stake,” says Talita Soares, EARTO Policy Officer, based in Brussels, Belgium.
The Commission is totally and fully aware of the problem, however. “We know of hundreds of projects involving SMEs that are facing problems due to this shortage of payment,” says Patrizio Fiorilli, spokesperson for the EC Budget Commissioner. Part of the problem, he believes, is that science funding is not ring-fenced like other EU programmes, such as Cohesion Policy projects that build roads in Eastern Europe, for example. “Under science and research, you do not have what we call ‘national envelopes’,” Fiorilli explains, so they are allocated “based on excellence” to individual projects.
Research funding lacks political protection
This means that science is a victim of its own self-selecting process: the best research proposals are awarded funds according to ‘mere’ merit. But they are without political protection from a single nation. Hence, they are vulnerable to budget cuts. The same does not apply to political Commitments, monies pledged by countries to send aid to Ukraine for example. “Science is something that Member States are less likely to fight for,” explains Michael Jennings, EC spokesperson for Research, Innovation and Science. “There’s groups that defend agriculture funding, cohesion funding, but there’s no natural group that defends science funding.”
But should science even have to fight its corner? The budget for 2014, including for science, has already been agreed. And both Jennings and Fiorilli stress that the EC is not asking for extra funds, only what has already been agreed. “In theory, the seven-year totals [for programmes like FP7 and Horizon 2020] should be respected, not least because they have been signed-off by all the main parties to the agreement,” says Iain Begg, a political economist at the European Institute, London School of Economics and Political Science, UK. “It may just be a cash flow question.”
Lack of cash flow, or in EU-speak “maximum use of the available flexibility instruments” is clearly a serious issue now. But if you thought that was bad, just look at what’s on the horizon. The EC’s own Q&A on the issue admits that Europe is running seriously in the red. At the end of 2011, the EC was unable to pay €11bn worth of bills, which increased and resulted in €16bn rolling over from 2012 to 2013. Now in 2014 there is a whopping €26bn deficit, and a European Council determined not to ask Member States for extra funds to cover the shortfall.
Cuts under discussion
Indeed, the Council of Ministers has called for a €2bn cut in the EC’s proposal for 2015. The Council has proposed to cut the Draft 2015 Budget for research by 10%, which would represent a €1 billion budget decrease. It is estimated that around 600 collaborative research projects funded by H2020 would be affected. This has led to the then European Commissioner for Research, Innovation and Science Máire Geoghegan-Quinn to state that the “sword of Damocles” is hanging over H2020 science projects and the 2015 budget.
The root of the problem is political. “The problem is that the Council and the Parliament will not agree a budget to match the Commitments of the Member States, and until that changes, the situation will only get worse. A whole lot worse,” says Fiorilli. “So we have a political problem that Europe says they want to invest more in research, but when you look at the budget that’s where they cut.”
But thing could get worse. “If we don’t get the amending budget [for 2014] and the 2015 budget [without proposed cuts], then we start to get into definitely bigger problems,” says Jennings. “This is not a situation which we think is sustainable.”
- Top Trumped: what does the US election mean for science and Europe? - 20 December, 2016
- Sweet tooth: countering one of our most lethal addictions - 9 March, 2016
- Policy matters: transparency is rarely a bad thing - 7 October, 2015